The Mideast 'bomb' no one talks about

November 4, 2004

By David R. Francis

If Iraq became a sturdy democracy tomorrow, and if Israel and the Palestinians settled their differences overnight, the Arab world would still face a problem that threatens its long-term stability: a population surge.

The growing number of young people from Yemen to Syria means more jobs to create and, quite possibly, less oil available to sell abroad.

Since these countries today provide a quarter of the world's supply of oil - and probably a third of it in 10 years - the population surge has relevance to the United States and other oil-importing countries.

In Saudi Arabia, for example, some 60 percent of the 25.6 million people are under 18 years old; 40 percent are under 13. Similar numbers could be cited for Yemen, Syria, and Iraq - nations with a poor record of nurturing economic growth and creating jobs.

"It's fertile ground for alienation ... for frustrated young people," warns Judith Kipper, a Middle East expert at the Council on Foreign Relations in Washington. And that portends political trouble.

For example, nations where young adults constituted more than 40 percent of the population were 2.5 times more likely to suffer civil conflict in the 1990s than those with a more balanced population structure, according to a study by Population Action International in Washington. The study looked at conflict in 180 nations from 1970 through 2000.

Yemen raises some of the biggest question marks. With 21.4 million people now, its present fertility rate stands at a whopping seven children per woman. At that rate, Yemen would overtake Russia by 2050 as one of the most populous nations in the world. Russia has a declining population, partly because of alcoholism.

"The population projections for Yemen are off the wall," says Richard Cincotta, an author of the Population Action International study. "You can't figure out how so many people could live in a place like that."

The situation is a little less critical in Saudi Arabia. Saudi women have on average 4.5 children. Still, the population could double in 25 years.

So far, Saudi Arabia has held one big advantage: oil. The nation's income from its exports of oil and petroleum-related products has risen this year to $120 billion, from $50 billion in 1999, estimates Fareed Mohamedi, an economist with PFC Energy, a consulting firm in Washington.

"It has put the government in a stable financial position," says Mr. Mohamedi. "It has started repaying domestic debt."

Other oil-exporting nations have also benefited from $50 a barrel oil. A virtuous cycle of growth has begun in the region, with Iran, Abu Dhabi, Kuwait, and Bahrain joining in the extra prosperity.

In the past, however, oil wealth has not trickled down adequately, notes Ms. Kipper.

The Saudi elite has for years invested much of its wealth abroad. Now it is starting to bring some money home. Mohamedi sees a prospect for the government and the private sector cooperating in creating jobs, which are desperately needed.

Because of its soaring population, the kingdom's per capita income has sunk from about $16,000 in 1974 to less than $6,000 in recent years. Unemployment has risen drastically. Millions of Saudis are poor. And Saudi youths want work. Possibly they can replace some of the few million foreign workers in the nation.

The new oil wealth, says Kipper, will help the Saudis and other Middle East regimes "buy off" their populations.

But as the number of people increases, so does internal demand. In a few decades, many OPEC nations in the Middle East will have such large populations that they could end up consuming much or all of the energy they now export, suggests Matthew Simmons, an oil consultant in Houston.

So creating sound economies will be paramount for the region. A World Bank study finds that the nations of the Middle East and North Africa will need to create close to 100 million jobs by 2020, a doubling of the current level of employment. It also notes that population growth could be headed lower. Setting an example, Morocco, Lebanon, and Tunisia have tamed fertility.

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